Mexico's state-owned oil company Petroleos Mexicanos (Pemex) needs more private-sector investment to meet its higher production targets, a business think tank said on Sunday.
The Center for Economic Studies of the Private Sector (CEESP), the research center of Mexico's Business Coordinating Council, generally approved the government's 2019-2023 business plan for the firm, saying that it had addressed several shortcomings and should help stabilize production.
"However, most analysts have expressed doubt about the plan's capacity to correct the path Pemex is on in a lasting way, in the medium to long terms, and to place the company on the road to profit and financial sustainability," CEESP said in a report.
"It is necessary to put in place a plan to more aggressively attract private investment," it added.
The government of President Andres Manuel Lopez Obrador should continue the strategy of "farmouts," inviting third parties to participate in the energy sector, the center said, noting it is something the head of state appears hesitant to do.
"In addition to providing needed financing, opening up to private investment would lead to opportunities to adopt the modern technology used by more advanced companies worldwide," the think tank said.
Pemex would also benefit from sharing the risk involved in deep-sea oil exploration, it said.
The government aims to raise crude output from the current 1.7 million barrels per day (b/d) to 2.7 million b/d by the end of Lopez Obrador's term in 2024.
Previous governments have failed to reinvest oil revenues to strengthen the company.
Editor:Cherie
